Tuesday, 17 March 2015

I'm not dead

The first shipment ready to go

I am certainly not dead at all. One could be forgiven for thinking some great tragedy had befallen me, after all it is 6 weeks since I posted on this blog. It is true that Dry January did push us close to the edge, and then, just as we thought it might be getting better, it turned out the great craft hop shortage might threaten to limit our ability to brew stunning beer. I might have been tempted on several occasions to drink myself to oblivion, after all, I probably have enough alcohol in the warehouse to wipe out a small army, should I be able to persuade them to consume it all.

But then, around the middle of January, an email popped up in my inbox that I felt sure would change things forever. It happens every-so-often. Sometimes it might be greetings with an unusual enquiry, which turns out to propagate long and fruitful acquaintanceship. Sometimes it is the offer of a trip to some interesting place all in the name of beer. Sometimes it is just an invite to take part in something fun.

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On this occasion the email started with "Promised I'd be back, and here I am" and proceeded to state that "In theory, we can look to do something with you from April" It was the beer buyer from Morrisons. Ann and I had been to see him at the nice head office way back last Autumn. We thought the meeting went quite well, but knew that these things can take time to happen.

The theory turned fairly quickly into a certainty. We had ramped down all operations due to the evil that is Dry January and stupidity of detox, And fairly quickly I realised we had a lot of work to do. Indeed, so much work that we really were not sure how we would do it.

Today we packed up three pallets and loaded them onto a wagon. This is just a pre-order to check that systems are all working, that we get the paperwork via Morrisons systems1, we send it to the right warehouse, and all the barcodes work the way they should. If all is good, next week we ship double figure amounts of pallets. Apparently it should be on the shelves around the beginning of April.

Good job the warehouse is full then.

And so, if the information I'm given is true, we'll have Code Black, Azimuth and Infra Red on the shelves, 4 bottles for £62, alongside some other stunning craft beers. How good are we to you?

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1It didn't work first time. We should have got the order last week, apparently, but there was a field missing in the database, or some such thing.

2The deal started yesterday. It seems many of the supermarkets are turning to great craft beer to try to bolster their trading performance. After all, when it's time to go do that weekly shop for potatoes, pasta, frozen pizza for when you get home from work late, and can't be arsed to cook something proper, at least the drudgery will be eased with the knowledge there is craft beer to be bought. At great prices too.

Hi, please ensure your delivery company get a stamped signed POD when delivering your goods, otherwise Morrison's are unlikely to pay you (I work in distribution and have discovered this first hand, they are almost underhand in not paying for stock that they have clearly received).

A small and fairly boring comment but hopefully a useful pointer.

Oh, and best of luck with this venture, I hope your beers fly off the shelves.

Very good to get brand visibility like this. Customers are far more likely to order your beers on draught in a pub if they've enjoyed them at home, and I do think lots of people who are less experimental in the pub (where beer's more expensive) are more likely to try something new from the supermarket first.

One question though: via that special offer, Morrisons will effectively be selling your beer at £1.25 a bottle ex VAT to customers. I'd be very surprised if you only charge £30 a case wholesale for your beers considering the nature of the beer (which by all accounts is very good indeed) and of your operation. Certainly I'd expect to pay maybe £35-£40, and then have to charge a fiver a bottle in the pub. So does the supermarket offer end up undercutting the price you'd charge an independent retailer or pub?

From experience these kind of stock turn arounds crop up every now and then. It keeps you on you toes when things look predictable. Good on ya tho will keep an eye out in my local Morrisons from now on.

From experience these kind of stock turn arounds crop up every now and then. It keeps you on you toes when things look predictable. Good on ya tho will keep an eye out in my local Morrisons from now on.

The thing is, the cost of logistics for delivery of bottles to London is considerably more expensive than getting pallets full to Morrisons warehouse. You see, they are going to be buying many thousands of pounds worth per month. One pub might spend a few hundred pounds per month with me.

However, I would hope to be less than £30 per case for 24x330ml for our regular beers into a pub in London, even with distribution and mark-up by our partners on the ground.

As a totally random single point of reference my ex-VAT price for a case of Azimuth is £29.50.

Not that I currently deliver in London. But I'd expect those that do would be pretty similar.

Of course pubs may as well just buy from Morrisons for the bottles in the Morrisons range I suppose? Assuming they want to stock what Morrisons stock... then again being on Tesco shelves certainly doesn't stop some pubs stocking Punk! Distribs will bring pubs the rest of the range... and, of course, deliver the joy in better value cask & keg form! ;)

I'm not sure that is a totally random point of reference. As a small, but extremely important distributor of Hardknott beer.

It is not unusual for many brands to be cheaper in supermarkets than via normal wholesale to pubs. The thing is, supermarkets don't offer commercial terms, often don't deliver free to commercial properties, provide point of sale support and many other things that competent wholesale partners should do.

However, I do think it is important to make sure that all routes to market are considered and as such we will be also looking at our trade distributors over the next few months. The economies of scale afforded by a big supermarket supply can also be beneficial to other routes to market.

I wasn't meaning to sound like I was complaining! FWIW. I welcome being able to buy Hardknott in Morrisons & hope it pans out in the longer run. Morrisons is the only supermarket I use with any regularity* - and the Morrisons beer range is currently crap. Hope this is part of a more general improvement to their range.

Inflation free economic growth was possible in the nineteenth century because Britain was taking resources from the Empire for practically nothing beyond the cost of transport, and the cost of transport was falling. See also, child labour and widespread destitution. But I think we need to ask whether constant economic growth is possible, and if so, whether it is a good thing.

Dave I do think you're being disingenuous to suggest that the cost of production alone determines your prices. You don't need to be coy on this point or use sales jargon like 'pricing structures': sensible buyers know that producers are trying to maximise profit, but if they feel like they are getting a good deal they don't worry about it. The retail price of beer is a sensitive issue because in many ways beer is 'ordinary' like bread or eggs. By making itself special, 'craft' beer has been able to command quite high prices, but if people are complaining and still buying in sufficient quantities then the price is right ;-)

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